Gov. Buddy Roemer Calls for Withdrawal From NAFTA, WTO
Politics / Protectionism Oct 23, 2011 - 01:47 AM GMTBy: Ian_Fletcher
I have detailed in previous articles my search for a Republican presidential candidate who is good on trade issues. The candidates range from the pro-China Huntsman, to the corrupt and naïve Perry, to those who sound good but leave unclear where they really stand, like Cain, to those who leave doubt as to whether they would back up their nice words with deeds, like Romney.
But I have found one candidate whom I believe is genuinely serious about fixing America's trade mess. He's an undeniable long shot, as Herman Cain was until recently. But it's not my aim here to handicap a horse race. It's to discern the consequences of getting one of these individuals elected.
That man is Buddy Roemer, the former governor of Louisiana and a former congressman. He was generous enough to grant me an interview on the subject a few days ago, and here's what he said:
Author: How do you feel about the just-passed Colombia, Panama, and Korea free trade agreements?
Gov. Roemer: I think they're just terrible and should be repealed. They will cost America jobs and expose us to all sorts of other problems. Panama is a huge center of offshore financial fraud, something I know from my days as the president of a [non-Wall Street] bank. This treaty takes away from America many of the tools we use to fight financial fraud. The Korea agreement is with a country that has an aggressive policy of targeting American industries, and it's very one-sided. Korea's going to be allowed to export to us something like six times the number of cars we get to export to them. And they're going to allow goods that are 65 percent Chinese to sneak into the U.S. under this agreement -- even goods from North Korea. Colombia's a mess right now: lots of political violence; you don't want to be getting into bed with people like that.
Author: How do you feel about NAFTA, CAFTA, and our other trade agreements?
Gov. Roemer: They should go, be repealed. We really ought to have learned our lesson about NAFTA by now. It has not been a success, not for us and not for Mexico, which is now losing jobs to China. Ross Perot warned Al Gore in that debate in '93 that there was going to be a giant sucking sound of job loss, and that's exactly what's happened. The same goes for CAFTA in Central America and the others.
These agreements didn't happen because the American people wanted them. They happened because corporate America wanted them and with the campaign-finance system we have now, corporate America can buy whatever it wants in Washington. That's why I took campaign finance reform as the key to my campaign and I've limited my contributions to $100. And remember, a lot of it wasn't even corporate America, it was multinational corporations that don't give a fig about this country anymore. They say they do, but they don't. They pretend to be American on Capitol Hill.
Author: How do you feel about the U.S. trade deficit?
Gov. Roemer: It's horrendous, and it's the one big cause of job loss that nobody in the political establishment -- not on the Democrat side, not on the Republican side -- wants to talk about. They're all blathering about expanding exports when it doesn't matter how much we export if our imports just keep going up even more, which is what's been happening. It's only net exports that are going to make a dent in our unemployment, and we're going the opposite direction right now with a trade deficit that is around $500 billion a year or so. That's a jobs plan we could do right now: end the trade deficit, or at least cut it.
A lot of people in the administration, in the Wall Street Journal crowd, in the Republican House leadership, seem to think our trade deficits aren't real money. So long as they get one more quarter of rising profits, one more term in office, they don't care. But it's real money, money that we borrow abroad and sell off our assets here in the United States, and that's a permanent loss of real wealth to this country. Quite aside from the jobs question. We're selling off our birthright for a mess of potage in the form of a few container ships of flat-screen TVs. This is where our international debt comes from, not just government spending.
Author: If elected president, what would you be willing to do to end the trade deficit?
Gov. Roemer: I think the time for talking and believing that other countries will play nice if we just ask them to, or maybe write up a bunch of rules like the so-called laws of the WTO, is over. We don't seem to get in this country that international trade is rivalry. It's not all rivalry, of course, there are positive benefits and so forth, which is why I'm not against trade, but there's a big part of it that's a rivalry. They win and we lose, which is what happens when we go head-to-head against these big state-capitalist countries like China.
So we've got to consider things like a serious tariff to end our trade deficit. Not something I'd rush into blindly, and maybe there's other ways to skin this cat, but I wouldn't flinch at putting a 30 percent tariff on Chinese goods, or a tariff on imports across the board, with the whole world or the countries running a surplus with us. And the interesting thing, of course, is that once the other side knows that, knows that we'd do a tariff, maybe they learn real fast to be a bit more reasonable? But you've got to have a credible threat that you'd do it if you want that "Speak softly and carry a big stick" stuff to work.
Author: How do you feel about the currency-manipulation bill that just passed the Senate?
Gov. Roemer: I support it. Wholeheartedly. Currency manipulation is obviously a big part of China's strategy to squeeze us dry, and we can stop it if we make the effort. I think the administration doesn't get state capitalism at all, how they have these deliberate strategies against us and how it's just a different animal from free-market capitalism, the kind of capitalism we have here in the United States. We're not dealing with a free market in trade anymore, and China's just the most blatant example. Japan, the EU, they all have their little games -- sorry, their big games -- to build up their industries at the expense of ours and run surpluses against us. Germany's currency is manipulated, de facto it is, because the euro is too strong for the weaker economies in Europe and too weak for the stronger economies, which they are. And frankly, this currency bill is fairly mild stuff, it's not anything radical and crazy. Boehner and Cantor should let the House vote on it.
Author: What do you think about the WTO? Gov. Roemer: It's pretty obviously a failure at this point. The whole idea was, in 1995 when they set it up, that all the world now knows how wonderful free trade is, so everybody wants free trade, and because of that, we can set up these rules for free trade and everyone's going to obey them. Even if the enforcement mechanism is a joke, it's like nothing, everyone's going to obey it because they believe in free trade. But they don't really believe in it. We do, maybe a few others, but the rest of the world doesn't. They believe in mercantilism, in grab-what-you-can, which is just a disaster when they interact with nations that try to play by free-trade rules. You can't twist the arm of a nuclear power like China with all these paper punishments the WTO hands out. It's a big fraud and America should withdraw. Out.
The WTO is also a terrible deal for American sovereignty, for American democracy. We've given these useless judges over in Geneva the right to tell us what laws we can and can't have, based on what some foreign company or investor in the U.S. doesn't like. Somebody called the WTO "the constitution of the world economy." We don't need somebody else's constitution to run our economy; we already have our own. That's the whole point of having a free country that we govern ourselves. Why are we throwing that away?
Author: What would you say to people who say free trade is about freedom, it's the American Way?
Gov. Roemer: It's not freedom for us right now, that's for sure. It's not freedom when foreign nations get to export their goods to us but our own companies, our own workers, are blocked in exporting the other way. We are not free in this situation, we are patsies.
And free trade is destroying our industries, our defense industries, which we rely upon to defend our freedom. We can't put an airplane into the sky anymore without parts made by potential adversaries. Do we expect the Chinese to lend us the money to buy from them weapons to defend ourselves? Free trade today, or the farce we call that, is one of the biggest threats to our freedom.
Let me tell you something about freedom. The Founding Fathers knew a think or two about freedom. And they were protectionists. They took their cues from Alexander Hamilton, the guy on the $10 bill. And he said, you're not going to have an independent country if you go with free trade. You're going to be at the mercy of Europe. And Lincoln was the same way. Teddy Roosevelt, and other great Republican -- and a protectionist. All those presidents on Mount Rushmore, they were all protectionists. Did you know that?
I did, actually.
So -- why do I believe that Gov. Roemer is serious about what he says when I'm still unsure about, say, Mitt Romney?
One, because I've gotten to know him a bit over the last few months, and know some of his advisors. I'm convinced these folks mean it. I can't read minds and I don't have a crystal ball to see the future, but this lot ring true.
Two, because there is no other plausible explanation for the positions he has taken. If, that is, Gov. Roemer were merely out for himself, he wouldn't be saying these things. There's just no percentage in it. I can believe -- I'm not sure at this juncture -- that Mitt Romney's position on trade may (repeat, may) be a carefully calibrated appeal for votes designed to harvest public angst on the issue without upsetting his business backers. But Roemer is going to get nothing out of this if he doesn't mean it. He's already alienated a lot of his friends in the Republican and corporate establishment by telling the truth about campaign finance, his other signature issue, and I think he's burned his bridges and staked his fight upon telling the truth on this issue, too.
Those readers who are interested in his non-trade positions can take a look at this article. Even if you don't think Gov. Roemer can win -- but look at how Cain came out of nowhere! -- casting a vote for him would certainly send a message that needs to be sent.
Ian Fletcher is the author of the new book Free Trade Doesn’t Work: What Should Replace It and Why (USBIC, $24.95) He is an Adjunct Fellow at the San Francisco office of the U.S. Business and Industry Council, a Washington think tank founded in 1933. He was previously an economist in private practice, mostly serving hedge funds and private equity firms. He may be contacted at ian.fletcher@usbic.net.
© 2011 Copyright Ian Fletcher - All Rights Reserved
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